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1. Number of first-time buyers hits 12-year high
2. UK clearing houses to maintain EU access
3. Warning over Brexit impact for businesses
Total new lending to first-time buyers in 2018, 4.9 per cent more than the previous year, according to UK Finance's latest figures.
The number of new first-time buyer mortgages reached a 12-year high in 2018, according to the latest mortgage trends update from UK Financepublished today. The data shows some 370,000 first-time buyer mortgages were completed last year, up 1.9 per cent on 2017 and the highest level since 2006 (City AM, online only).
The number of new homemover mortgages in 2018 was down 1.9 per cent compared to the previous year, totalling 367,800. Meanwhile the number of remortgages jumped 10.8 per cent year on year, with lending up 13 per cent to £85 billion. Buy-to-let mortgage numbers dropped by 11.5 per cent.
Commenting on the data, Jackie Bennett, Director of Mortgages at UK Finance said:
The mortgage industry helped 370,000 people buy their first home in 2018, the highest number in twelve years, as competitive deals and government schemes such as Help to Buy continue to boost the market.
Homeowner remortgaging also saw strong growth driven by customers locking into attractive rates, a trend we expect to continue in 2019 as more fixed-rate mortgages come to an end.
Demand for new buy-to-let purchases continues to be dampened by recent tax and regulatory changes. However, the number of buy-to-let remortgages reached a record high of almost 170,000 last year, suggesting many landlords remain committed to the market.
UK-based clearing houses will still be able to serve European customers even in the event of a ?no-deal? Brexit after the European Securities and Market Authority (ESMA) yesterday granted them year-long licences (Financial Times, p27, £, Daily Telegraph, B1, £). The decision means London can remain the hub of the ?660 trillion European derivatives market after the UK leaves the EU, following pressure to confirm that cross-border derivatives contracts would be recognised after March 29.
The Financial Times reports, however, that concerns remain over capital markets post-Brexit, with UK Finance's Director of International and Brexit policy, Conor Lawlor, saying that 'significant risks remain, including on the continuity of cross-border contacts that have yet to be addressed through the EU Commission or EU member state actions?.
Firms selling to customers in Europe could face a ?massive barrier to trade? the Federation of Small Businesses has warned, following proposals from the EU that some companies may have to appoint an authorised representative based in the EU (The Times, p38, £). The rules, which could be introduced in 2021, would require companies situated outside the EU to designate an individual within the area to hold the necessary compliance documentation and be held accountable for non-compliance.
This comes as Dame Judith Hackitt, chairwoman of Make UK, the manufacturers? organisation, is due to say at the organisation's annual conference today that 'the prospect of leaving with no deal means the UK will be a far less attractive location for manufacturing in the future? (The Times, p37, £). Make UK has also warned that reverting to World Trade Organisation rules would ?kill off some sectors of industry overnight? (The Guardian, p33).
Andrew Kinnes and Neil Campbell, Shepherd and Wedderburn LLP, discussequity release based on observations from Scottish practice.
The age of the average first-time buyer has increased by eight years to 34 since 1997, as average house prices have risen by over 270 per cent, according to an Office for National Statistics study (The Guardian, p13).
Internal research by the Bank of England has found that ethnic minority employees are leaving the organisation in disproportionate numbers and are more critical of the culture at the Bank (The Times, p39, £).
The European Central Bank's chief economist, Peter Praet, has said it will reassess the outlook for bank lending next month over fears that credit supply could tighten (Reuters, online only).
Consumer confidence over the state of their household finances has fallen to its lowest level since March 2018, according to IHS Markit's monthly index (Daily Mail, p68).
Matthew Lynn, financial columnist for the Daily Telegraph (B2, £), argues that the importance of the European Union to the UK economy is declining, and describes five reasons as to why this is. Firstly, the rest of the world is growing much faster, and the rate of UK exports to expanding markets is higher than that to the EU. Secondly, the EU has been stagnating, as witnessed by Italy recently entering a recession. Thirdly, technology is changing the way trade operates, and it is easier than ever to sell across the world. Fourthly, the value of service exports is increasing, and the UK has a strong competitive advantage in this field. Finally, Brexit itself will inevitably change the UK's relationship with the EU economy. Lynn concludes that the UK economy has been drifting apart from Europe for a while; the politics is now just catching up.
Writing in this morning's Financial Times (p13, £), Karen Petrou warns that regulation of fintech companies is required to prevent the chance of discrimination and widening economic inequality. Petrou, a managing partner of Federal Financial Analytics, writes that some existing firms have used algorithms based upon race, class or gender in programming their Artificial Intelligence, for example in the selection of product offerings. Petrou closes by warning that as fintech companies also lack upfront capital to cover redress, they are also presenting a real financial risk to their customers.
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